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Canadian Winery Sues Ontario Liquor Board for Slander

Konrad Ejbich
Posted: September 28, 1999

Canada's third-largest winery has launched a $5 million lawsuit against one of the world's largest purchasers of wines and spirits, the Liquor Control Board of Ontario.

Gabriele and Rossana Magnotta, who own Magnotta Winery in Ontario, allege that the government-run liquor monopoly -- which operates 600 stores throughout the province -- has slandered and defamed them and their winery from the time the company started doing business, in 1990.

Magnotta makes a wide variety of red and white wines. However, only its Vidal Blanc Icewine is available at LCBO stores. Although Ontario wineries licensed after 1988 are permitted only one on-site retail store, Magnotta has successfully used loopholes in Ontario's liquor laws to acquire five retail licenses by buying or establishing additional wineries. This allows the publicly traded company to sell the majority of its wines directly to Canadian consumers.

In a 30-page statement filed in Ontario Superior Court, the Magnottas itemize dozens of instances in which LCBO employees are alleged to have made disparaging statements about Magnotta wines or implied that the company's ice wine was "fake."

The Magnottas claim that LCBO officials knew about the alleged defamations as far back as 1993 and that they had verbally agreed to correct them.

However, in February 1994, LCBO chairman Andrew Brandt held a press conference to display smuggled and bootleg wines netted by police. The Magnottas allege that among the contraband, grape-juice buckets with their logos were placed up front and news cameras were invited to focus on them, although the winery was not involved with the illegal operations.

Gabriele Magnotta said that customers reported that defamations continued to occur, so he sent friends into some LCBO stores to surreptitiously question product consultants about his wines. He then hired a private investigator to record conversations with several clerks at the government stores.

After the lawsuit was reported in Canadian newspapers, Magnotta said he received additional "spontaneous, unsolicited, corroborative evidence for [his] claim" from the public.

He is suing for compensatory, general, aggravated and punitive damages, totaling $5 million. In addition, he is asking for a permanent injunction to stop the liquor board from making defamatory remarks and order it to publicly retract previous statements.

The LCBO declined comment. No court date has yet been set.

To learn more about Magnotta:

  • April 20, 1998
    Canadian Sparkling Ice Wine A First

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